Prof Chuck Holmes, The Common Sense Economist

Conservative or Liberal?

As election time is near, I thought it might be interesting to think about some of the theoretical differences between conservative and liberal thought, actual differences between modern conservatism and liberalism, and the effect of each on the economy.
The Oxford Dictionary of Philosophy defines conservatism as “a laissez-faire ideology of individualism with emphasis on personal responsibility, free markets, law and order, and a minimal role for government, with neither community, nor tradition, nor benevolence entering more than marginally.”
Modern conservatives espouse the characteristics in the definition above. They believe in personal responsibility, smaller government and low taxes, less government spending, a market economy, and the Constitution with emphasis on the Bill of Rights. They believe in less regulation and free enterprise. They believe in a strong foreign policy and a strong military, and they prefer Republicans to Democrats. But their actions have not always reflected their beliefs. President Eisenhower promoted the Interstate Highway System at a cost of $128.9 billion. President George W. Bush increased the national debt by $1.5 trillion during the second Gulf War, giving rise to the spending spree that led to the current debt of $17.8 trillion. He also promoted a costly prescription drug program included in Medicare. The unfunded liability for that program now stands at over $20 trillion. Most conservatives don’t see a clear way out of our current debt of $140 trillion. The best bet is economic growth, which only can occur through the market system. Conservatives believe in personal responsibility, that individuals can better decide how to spend their money than government. Conservatives believe in self-reliance, that people should have the opportunity to succeed, to improve their place in life, for equality of income, for better jobs. The emphasis in the Civil Rights Act of 1964 was on equality of opportunity. Government interference has shifted this to equality of outcomes.
The Oxford Dictionary defines liberalism as “a political ideology centered upon the individual, thought of as possessing rights against the government, including rights of equality of respect, freedom of expression and action, and freedom from religious and ideological restraint.”
Modern liberalism seems to have departed significantly from the classical definition. The ideology centers upon class rather than individual as the government places citizens in competing groups: rich versus poor, wealthy versus needy, independent versus dependent. It is the government’s job to take care of the poor and needy, and in the process make them dependent on the government. Thus the government cannot be limited in size. John F. Kennedy defined a liberal as “someone who cares about the welfare of the people—their health, their housing, their schools, their jobs, their civil rights, and their civil liberties.” FDR said “The liberal party insists that the government has the define duty to use all its power to meet new social problems with new social controls.” The iconic liberal economist Paul Krugman states, “I believe in a relatively equal society, supported by institutions that limit extremes of wealth and poverty.” When people are poor, or when people are too rich, it’s the government’s job to step in and resolve the discrepancy. The usual method is redistribution of income, the “Robinhoodian” method of taking from the rich and giving to the poor. The belief is that you can make poor people rich by making rich people poor. The belief is also that the rich who got that way by working will continue to work at the same rate. They probably do, but then the Tiebolt (Tee-bow) effect kicks in. They vote with their feet. Liberals believe that there is no limit to the size of government. There is no limit to the taxes the government can collect. Ideally, all of the earnings of the public will not be theirs, but will belong to the government. A wise and benevolent government will then provide the people with necessities of life, as determined by the government.
Liberals and conservatives want the same things for citizens. They want them to have schools, jobs, health, house, civil rights, and liberty. The difference is how these necessities of life will be attained. Even conservatives believe the government should provide for the truly needy, but people should be provided the opportunity for self-improvement. The market must be allowed to provide jobs and training. Economic growth is paramount. Charles Murray, in his important work “Losing Ground,” found that our efforts to reduce poverty has led to a stagnation in the poverty rate. His findings led President Clinton to “end welfare as we know it.” As President Reagan said, “The government is not the solution to the problem. The government is the problem.” Government aid has led to a class of dependency, in which, like Obama’s Life of Julia, people expect the government to provide complete cradle-to-grave care.
In the interest of honest debate, I invite rebuttal from any of my newsletter readers, especially from my long time friend and liberal colleague who describes himself as a “good Marxian.”